The problem was, even in peaceful cities, if you failed in economy and borrowed money from Caesar and not pay back for a long time or failed to send him his “gifts” he would send an army to destroy you.

In peaceful cities that was game over. In combat cities you could potentially defeat his army once or twice and buy yourself some time to pay up his debt.

Most of the economic/"peaceful" cities also have invasions that you need to deal with, though they're smaller than if you had chosen the military city.